A Very Cheap Term Life Insurance (called Multiple Option Super Term)

Last July, I attended an annual convention of IMG members at SMX, Mall of Asia.

I was surprised. There I became a witness to a big number of people who were once ordinary people as spenders and who barely knew about saving but now have become advocates of financial literacy both inside and outside the country teaching people the importance of taking charge of their financial future.

Now one of the things announced there, which I’d share with you in this post, is about this term life insurance offering that I believe is very cheap for its coverage. This is exclusive to IMG members though but sharing here nevertheless for those looking for a much affordable term life insurance option.

As some of you may already know, I am member of IMG for quite some time now.

I signed-up last year as a member primarily because of the personal benefits I get from it (you can read some of its benefits here), and second because of the fit of their mission to this blog’s which IMG does through its Wealth Academy (WA). IMG WA works like a school that contains a series of trainings on personal finance, investment instrument and strategies, entrepreneurship and even the proper stewardship of money. With the environment, opportunity and flexibility it offers, IMG serves as a one-stop-shop for anyone who is serious in making big changes in his financial life. I’ve personally seen lives changed because of this.

But going back, this financial product I’m pertaining to is called IMG’s Multiple Option Super Term (MOST for short).

Multiple Option Super Term program is a group insurance program offered in partnership with Philam Life, the country’s premier life insurance company, exclusively to IMG members.

But before we dig deeper into MOST, let me share some intro of the new terms mentioned above.

About Philam Life

I’ve been hearing a Iot about Philam before but I had my first personal encounter with it when I joined one of their trainings last 2012. The training which lasted for a few days was set to prepare their agents for the SEC CIS (Certified Investment Solicitor) exam. While I was never a Philam agent, I was just informed by the trainor that it’s about to happen and when I found out that its schedule fit mine, I opted to join in to take advantage of the learning opportunity.

Luckily, after adding few days of review after the training, I took the CIS exam at SEC building at Ortigas and passed it! Hooray!

But more than the exam, that training really taught me a lot about mutual funds, how it works and how it’s operated and regulated for the benefit of its investors. (In case you want to invest in mutual funds, you can contact me here and I’ll refer you to my trusted agent).

But more than the Philam as a company, what I liked more is the man who was once behind its success – Mr. Rex Mendoza.

The Best Financial Speaker of our time

I believe Rex Mendoza is the best finance speaker the Philippines we have now. I’m certainly a fan!

He’s that kind of speaker who has the power to connect and relay full of sense message to even the most ordinary people. He speaks with so much power but still connecting. He has a bank of good humor materials too which makes the session equally informative and entertaining.

Rex Mendoza is also one of IMG’s most dedicated mentors when it comes to mutual fund investing.

For many years he’s the President of Philam but recently has stepped down to take consulting roles to a bigger market. This transition would allow him, according to Rex himself, to spend more time mentoring and building IMG trainees.

So much for that Philam introduction.

Now we go to the basics of Insurance and how it plays in the personal finance world

Every day of our life is a day full of risks, from womb to tomb. You even don’t need to get out of your own home to be exposed to one. And if you’re really unlucky, the risk can materialize even while you’re sleeping (cases of bangungot!).

Yet the risk is not just in dying. A greater risk is leaving your loved ones ill-prepared financially. There is where insurance comes into the picture.

Insurance is primarily a form of protecting your income in case of your untimely death. The insurance will give your beneficiaries a benefit that will hopefully prevent them from suffering because of the loss of their source of living (which is YOUR income). As a result, the standard of living of your beneficiaries becomes protected. This explains why insurance can be interchanged with the word protection.

Types of Insurance

There are generally two types of insurance – term life insurance and permanent life insurance.

Term life insurance covers you against the risk of death for a specific sum and for fixed period.

In terms of benefit, term insurance will pay your beneficiaries ONLY when you die.

In case you’re too healthy (and lucky) to live long and outlive your policy, your or your beneficiaries receive nothing. This explains why term insurance is the cheapest form of life insurance in terms of premium – it has no cash value attached.

Since this covers a person for a fixed period only, the policy has to be renewed as necessary to cover a new fixed period.

For example, annually renewable term life insurance will cover a person for a year at a time (duh!). This is typically the form of life insurance offered to a group like employees of a company.

While having the cheapest premium for the same coverage, term life insurance does not guarantee same amount of premium upon renewal (or anytime after your current term life insurance reaches its maturity). Most likely this level of premium you need to pay will increase because of the added risk you bring with yourself (due to the deterioration of your health condition with time) upon buying a new policy. Another risk here is that renewability is also not guaranteed though there are some providers that has automatic renewability option.

So that’s the basics of term life insurance.

The second type of insurance which we call Permanent Life Insurance covers those insurance plans that combine death benefits with a savings component. In the Philippines, permanent life covers Whole or Ordinary Life, Endowment and Variable Universal Life (VUL). I’ll discuss more on this in the next posts. (But again, if you’re interested to personally learn more about this, you can contact me here and I’ll refer you to my trusted agent).

Now we go to the financial product I mentioned.

Below are the listed benefits of MOST:

Insurance Benefits Included in the Plan

Yearly Renewable Term (YRT) Life Insurance provides Triple A protection: Anytime, Anywhere and Any cause of death except suicide and pre-existing conditions for the first two years

Accidental Death, Dismemberment & Disablement Benefit (ADDD) pays a benefit over and above the YRT for death or dismemberment due to accident; Philam Life will double the amount of coverage if the member dies due to accident, or will pay a percentage of the amount of coverage in case of dismemberment or disablement

Terminal Illness Benefit (TIB) advances 50% of the YRT, up to a maximum of P500,000 if the insured member is medically diagnosed as having a life expectancy of 12 months or less

Optional: Cancer Critical Illness Benefit (CIB) pays a pre-determined amount if the member is diagnosed with Cancer. The benefit is payable if the cancer is diagnosed for the first time and:

Cancer has metastasized and was initially diagnosed after 180 days following the effective date of the of the Cancer CIB rider; or,

Member has been covered under the policy for at least two consecutive years.

a living benefit paid over and above YRT.

The reason why it’s called Multiple Option is that this product can take several forms that will suit the preferences of a person.

Another thing that sets this product apart from other offerings in the market is its super cheap premium.

Under this special offering, a person as young as 19 person can already get 1M coverage with just 2580 annual premium (and this increments by as low as 50-150 pesos if you’re older. )

Say you’re 30 years old, then you’d only need to pay 3230 and you get the same 1M coverage. By the time you’re 35, the premium fee only becomes 3530 . (If you want 2M coverage, then just multiply the premium by 2.)

I surveyed external agents about the market price of this same coverage and found out that the common premium ranges much higher than this. You can check too your favorite agent yourself and you’ll see that this offer is obviously a steal for its cheaper premium.

Let me know your thoughts on the above offering. As mentioned, the limitation of this is that this is only available for IMG associates.

Of course you can always look for similar plans outside on your own, but if you wish to learn more about this and take advantage of its benefit, you can send me an email through my contact form – or much better, attend IMG’s Basic Money Management Seminar (open to public) and learn basic proper money handling principles too.

If you’re new to
personal finance and investing, you’ll want to know that this blog is
written to help you achieve your financial goals. You can can start on this page, orcontact me via email if you have specific questions. Enjoy learning & earning!Omeng Tawid |

If you’re new to
personal finance and investing, you’ll want to know that this blog is
written to help you achieve your financial goals. You can can start on this page, orcontact me via email if you have specific questions. Enjoy learning & earning!Omeng Tawid |

Disclaimer: The information contained in this site are not intended as financial advice. Readers should be aware that investments in securities, such as stocks or other financial instruments, involve risks. Loss of capital is a possibility. Past performance is not indicative of future returns. Please consider your investor profile as you decide on the fund to invest in.